After around 30 years of rapid economic growth, China has become the world's second largest economy, the world’s largest exporter and a major driving force for global economic growth (World Bank, 2012). In parallel with its continuous expansion in economic growth, Chinese firms’ overseas foreign direct investment (OFDI) has also increased rapidly, a fact which has attracted substantial attention from the academic community, policy makers and practitioners. According to the Investment Development Path theory1, the growth of Chinese overseas investment is consistent with its economic development. Existing studies have examined the motivation for overseas investment as well as the choice of destinations and mode of entry of large Chinese enterprises when they invest directly in other countries. However, due to strict financial regulation in China and a tightly regulated capital account, some instances of overseas investment, especially overseas investment by non-state-owned enterprises, is not fully reflected in data released by the government. Therefore, macro data cannot fully reflect the current situation of Chinese enterprises with respect to overseas investment, especially in the non-state-owned sector.

This project aims to examine the overseas investment strategies of firms in Guangdong Province, China. We focus on the characteristics of firms which undertake OFDI, the incentives for and the main obstacles of overseas investment, the destination of OFDI from Guangdong, the strategies to conduct OFDI, and the impact of overseas investment on company performance and future development. The survey shows that the characteristics of firms significantly affect the firms’ incentive to carry out OFDI and that some of the incentives and strategies to conduct OFDI demonstrated by Chinese firms are not consistent with what is often claimed by the media and existing studies. Evidence from the survey suggests that OFDI by Chinese MNEs is still in its infancy stage. At this stage, the functions of overseas subsidiaries mainly involve marketing and not production. An over-concentration on particular destinations, the lack of talented personnel with sufficient international management skills also overshadow the OFDI of Chinese firms. However, whilst the utilization of local financial and labour resources pool is still limited, Chinese MNEs have considerable engagement with local economies and communities via collaboration and public activities. The findings from this survey will provide important policy and practical implications to Chinese firms and the governments of both China and other countries.